Arizona - The Hidden Gem of Asset Protection

When designing the domestic portion of an asset protection structure that maximizes both control and security, few strategies rival the combination of an Asset Management Limited Partnership (AMLP) with an irrevocable Asset Protection Trust such as the Bridge Trust®. But among the many U.S. jurisdictions where one might form a limited partnership, Arizona offers a unique statutory advantage that turns a potential liability into one of the most powerful asset protection features available in U.S. law.

The Asset Protection Challenge

In a well-structured AMLP, the trust (typically a Bridge Trust) holds the limited partnership interest, while a separate entity (often an LLC) serves as the General Partner. This setup allows the trust to enjoy economic participation without triggering managerial control concerns, while the General Partner retains discretion over operations and distributions.

The challenge in most states is that limited partners cannot unilaterally demand distributions or withdraw their capital—unless the partnership agreement says otherwise. This rigidity is normally desirable for protection purposes, but it becomes problematic if there's ever a need to move assets quickly in response to legal duress, such as a lawsuit, or court order.

Arizona's Unique Statutory Advantage

Unlike Nevada, Delaware, or any other asset protection jurisdiction, Arizona law includes a built-in withdrawal right for limited partners under A.R.S. § 29-333:

“A limited partner may withdraw from a limited partnership at the time or upon the happening of events specified in writing in the partnership agreement.”

This seemingly mundane clause becomes a strategic superpower when integrated with the Event of Duress provisions in the Bridge Trust.

How It Works: Withdrawal on Duress

When paired properly, the Bridge Trust serves as the Limited Partner in an Arizona AMLP. The AMLP agreement then specifies that the Bridge Trust may withdraw from the LP upon the declaration of an Event of Duress by the Trust Protector. This declaration is part of the Bridge Trust’s internal mechanism that allows for the transition of control and jurisdiction offshore—into a full-fledged foreign asset protection trust in the Cook Islands.

Here’s what happens when the Event of Duress is declared:

1. The Bridge Trust exercises its Statutory right to withdraw from the Arizona AMLP.

2. The General Partner is required to distribute the withdrawing LP’s capital account, either in cash or in-kind.

3. The Bridge Trust, now acting under foreign protection, takes receipt of those assets.

4. Jurisdiction shifts offshore, and U.S. courts no longer have power to reach the trust’s assets.

This process is clean, fast, and—crucially—pre-agreed to in both the partnership agreement and trust instrument, making it extremely difficult for a creditor to challenge as a fraudulent transfer.

Why Arizona  is Superior to Nevada (and Others)

Feature	Arizona (A.R.S. § 29-333)	Nevada / Delaware / Others
Statutory LP Withdrawal Right	✅ Yes – Predefined	❌ No – must be contractually granted
Use With Event of Duress	✅ Naturally integrates	✅ Possible, but must be affirmatively drafted
Charging Order Protection	✅ Statutory	✅ Statutory
Flexibility With Asset Protection Trust	✅ Embedded trigger mechanism	❌ No statutory support
Predictability in Crisis	✅ LP can demand distribution	❌ GP must permit or delay

In Nevada or Delaware, you must affirmatively draft the withdrawal clause. If the GP resists or delays, the trust may not be able to force a distribution without a time delay or other legal process.  Further is critically important not to leave that much discretion in the hands of the GP, who is often the client themselves. In Arizona, the LP’s right is statutorily guaranteed, turning a common-law vulnerability into a legal lever to protect wealth under pressure.

Combining with a Wyoming GP for Privacy

To complete the structure, the General Partner may be formed as a Wyoming LLC. This adds:

• Managerial anonymity (Wyoming does not list LLC members/managers publicly),

• Charging order protection for the GP entity itself,

• And separation between management authority and beneficial interest.

The result is a powerful combination:

• Arizona AMLP (with duress-triggered LP withdrawal),

• Wyoming GP (shielded and private),

• Bridge Trust LP (domestic until needed, foreign when threatened).

Conclusion: Arizona Is the Hidden Gem of AMLP Jurisdictions

In most jurisdictions, flexibility and protection are a tradeoff. But in Arizona, the statutory LP withdrawal right gives you the best of both:

• Rigidity against creditors,

• Flexibility for trust-triggered protection,

• And full legal foresight baked into the design.

For estate planners, asset protection attorneys, and fiduciaries looking to integrate U.S.-based limited partnerships into a global asset protection plan, Arizona offers the only statutory safety valve that can be converted into an offensive distribution strategy when duress strikes.

In other words, Arizona doesn’t just protect you from attack—it gives you a statutory escape hatch to win.

Lodmell & Lodmell, PC is one of the nations leading Asset Protection Law Firms and the creators of The Bridge Trust®.  L&L serves clients nationwide and may be reached at [e-mail] or 602-230-2014.